The domestic steel industry faced crisis because the US government announced an administrative measure that imposes 25%tariffs on steel products.
Particularly, Gwangyang Steelworks, the biggest steel production base in Korea, is keen on its tactics because it is more likely to be directly affected. As well as, the long -term recession of the Yeosu Petroleum Chemical Mountains is predicted to be hit within the eastern economy of Jeonnam.
The US imposition of steel tariffs is to withdraw the applying of Article 232 of the Trade Expansion Act and impose a complete of 25%of tariffs. It was burdened.
Consequently, the crisis is predicted throughout the steel industry because the competitiveness of the US steel exports weakens.
Problems expected to impose steel tariffs within the US
▸ Lower export competitiveness within the domestic steel industry -US is considered one of the main export markets within the Korean steel industry. Previously, tariffs have been exempted from quota volume, but now 25%of tariffs are applied. Which means Korean steel products will lose price competitiveness within the US market.
▸Price of Korean steel products → weakening competitiveness in the US. The opportunity of reducing Korea’s steel exports within the US market. That is an obstacle in comparison with US local firms and other competitors (Japan, Europe, China, etc.).
Ripening effect on Yeosu Petrochemical Haksan and Gwangyang Steelworks
Currently, the local economy has shrunk as a consequence of the long -term recession. As well as, the export crisis of the steel industry can have a serious impact on your entire economy of the eastern a part of Jeonnam.
With the recession of the Yeosu Petrochemicals Mountain, there may be a risk that the foremost industry, which accounts for greater than 70% of the Jeonnam region, is at the identical time.
The trend results in slowing exports of Gwangyang steel mills, requiring adjustment of production, → personnel and suppliers’ hits.
As well as, it is predicted to adversely affect the related industries (logistics, construction, shipbuilding, etc.) within the region when the steel and petrochemical industry contracts.
The spread of protectionism in the worldwide steel industry
The US tariff policy is predicted to affect not only the Korean steel industry but additionally the worldwide steel industry.
▸ If steel firms similar to Japan, Europe, and China are also affected by tariffs, global competition intensifies
▸Repletion of price competitiveness of Korean steel products → Diversification of exports to other markets
▸ The opportunity of strengthening protection measures not only in the US but additionally in other countries (the opportunity of imposing additional tariffs on EU, Japan, China, etc.)
Evaluation of response measures and adequacy evaluation of Gwangyang Steelworks
In preparation for the incident, Gwangyang Steelworks said, “We are going to closely analyze the situation and prepare countermeasures by consulting with the federal government and steel associations.”
As well as, the strategy is to “maintain global competitiveness by developing high value -added products and reducing manufacturing costs.”
▲ Inspection of response strategy of Gwangyang Works
▸ Developing high value -added products and improving quality
▸ Increases profitability by expanding high value -added products similar to automotive steel sheets and eco -friendly steel products
▸ Pioneering other export markets outside the US (Europe, Southeast Asia, the Middle East, etc.)
▲ Effective: It’s an efficient strategy in the long term, but there may be a limit to stop short -term blow.
▸ Manufacturing cost reduction and production efficiency
▸ Strengthening the competitiveness of steel headquarters → Reduction of production costs
▸ Electric and mid- to long -term investment through the event of hydrogen reduction steel technology
▲ Proper direction: Nonetheless, the main target is on long -term structural improvement than short -term effects, which is more likely to be short for immediate countermeasures.
▸ US market response and customs bypass strategy
▸ Steel processing and distribution networks within the US (establishment of local joint ventures, utilization of third country production bases, etc.)
▸ Pioneering markets outside the US using ▸FTA and trade agreements
Proper response: A method to actively utilize the production base in the US, nevertheless it takes initial investment costs and execution time.
Proposal of the domestic steel industry and the federal government’s response strategy
▲ Strengthening the diplomatic response of the federal government level
▸ Goal exceptions to the Korean steel industry through trade negotiations with the US
▸ Diplomatic cooperation to receive 25% tariff exemption by the US imposed on imported steel
▸In cooperation with the steel industry closely with the steel industry, measures to export exports to the US
▲ Promotion of diversification of export markets
▸ Pioneering emerging markets aside from the US (India, Southeast Asia, Europe, the Middle East, etc.)
▸ Diversify export strategy to scale back dependence on the US market
▸ Strengthening specific market targets centered on high value -added products
▲ Expansion of investment in modern technology within the steel industry
▸ Development of eco -friendly steel production technology (hydrogen reduction steel, expansion of electricity)
▸ Automation and AI -based smart factory construction → Increased production efficiency
▲ Essential strategy for securing long -term global competitiveness
▸ Public -private cooperation and expansion of corporate support
▸Sthological joint council between the federal government and the steel industry
▸ Expansion of tax advantages and support for technology development of steel firms
▸ Increase the self -sufficiency rate in Korea and innovate the production process to scale back costs
An official from the trade work identified that “the imposition of steel tariffs within the US is putting a big burden on the Korean steel industry, including Gwangyang Works.”
Particularly, the officials expect to say that it’s more likely to adversely affect the local economy consistent with the recession of the Yeosu Petrochemicals Mountain.
Consequently, the need was raised in parallel with short -term and long -term strategies similar to “government -level diplomatic negotiations, reducing the fee of production of firms, diversifying export markets, and investment in eco -friendly technology.”
Gwangyang Steelworks can also be developing high value -added products and reducing costs, but within the short term, energetic market response and government cooperation are required.
Experts in trade business predicted that “the steel industry and the federal government will establish an in depth cooperation system and seek countermeasures,” he said.
By Yang Joon -seok, reporter kailas21@aitimes.com
